Google Inc reported earnings after the close today which surpassed Wall Street quarterly forecasts.

Web traffic, searches and revenue growth were strong in all major parts of the world, Chief Executive Eric Schmidt said.

Net income for the third quarter rose to $1.35 billion, or $4.24 a diluted share, from $1.07 billion, or $3.38 per share.

Excluding employee stock compensation costs and one-time items, profit rose to $4.92 per diluted share and topped Wall Street’s target of $4.75, according to Reuters Estimates.

Revenue, including commissions paid to affiliated advertising sites, totaled $5.54 billion, up 31 percent from the year-earlier quarter but up only 3 percent from the second quarter of this year.

The results were powered by international sales, which rose 41 percent.

Revenue fell squarely in the middle of forecasts calling for an increase of 26 percent to 37 percent, signaling the company’s decelerating growth. Revenue had risen 57 percent in the 2007 third quarter over the same 2006 period.

Google continues to generate cash at one of the fastest rates in the Internet industry. It had $1.73 billion in free cash flow in the third quarter, up 60 percent both from the year-earlier quarter and the quarter ended in June.

Paid clicks, rose 18 percent from the year-ago quarter and 4 percent from the second quarter ended in June.

Google shares were up over 10% in after hours trading at $390 a share after hitting under $320 a share in midday trading.